USD/JPY: Soars to long-term high prices
Yesterday’s signals were not triggered, as there was no bearish price action when the price reached 110.69.
Today’s USD/JPY Signals
Risk 0.75%.
Trades must be taken from 8am New York time Thursday until 5pm Tokyo time Friday.
Short Trade Idea
Go short following a bearish price action reversal on the H1 time frame immediately upon the next touch of 112.42.
Put the stop loss 1 pip above the local swing high.
Move the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to ride.
Long Trade Idea
Go long following a bullish price action reversal on the H1 time frame immediately upon the next touch of 110.69.
Put the stop loss 1 pip below the local swing low.
Move the stop loss to break even once the trade is 20 pips in profit.
Remove 50% of the position as profit when the trade is 20 pips in profit and leave the remainder of the position to ride.
The best method to identify a classic “price action reversal” is for an hourly candle to close, such as a pin bar, a doji, an outside or even just an engulfing candle with a higher close. You can exploit these levels or zones by watching the price action that occurs at the given levels.
USD/JPY Analysis
I wrote yesterday that we had seen significantly bullish technical developments and it would create a more bullish picture if the price could hold up over the rest of the day. I’ve also been speaking recently about the increasing probability of a very strong, explosive bullish breakout above the big round number at 110.00. I decided to take a bullish bias later if we had gotten a New York close above 110.18.
Overall this was a great call, as you would be up by about 50 pips at least as at the time of writing, even if you had entered a long trade to exploit this strongly bullish price movement as late as yesterday’s New York close.
The USD is very strong and now it is the Japanese Yen’s turn to get hit – and it has been a relatively weak currency for several months now.
I remain bullish, although of course there are likely to be dips along the way. I think the price will reach the next resistance level at 112.41 before it gets back down to an area close to the big round number at 110.00. There is room for the price to rise but the resistance at 112.41 and its confluence with the big quarter-number at 112.50 mean the price will likely struggle to get beyond that area in the very short-term.
There is nothing of high importance due today concerning either the USD or the JPY.